Wednesday, October 31, 2012

New Credit Card Rule in Japan Bad For Small Businesses

Because of so many credit card scams and crooks running around nowadays, it seems that the credit card companies are getting stricter and stricter by the day.... 

A good friend at Citi Bank informs me that the Japan Credit Card Association has passed a new rule that says all internet companies using credit card must register with the association and get a individual "credit card approval stamp" for their site and every sale must run through their approval process first before each and every purchase is made! 

The big companies like Amazon and Rakuten have rejected this new rule but the association, according to my friend, is insisting upon new and small businesses to toe the line by early next year... 

This is just another scam targeting small businesses and making it more difficult for them. 

How this process works is like this: A customer decides to buy something. They must access the Japan Credit Card Association site first to get an approval (to confirm they are the registered user of that card and not a fraudster). The customer gets the approval first, then receives some sort of numbered identification. Then, after that, they go to an individual site and buy what they were looking for! 

It's obvious that this is damaging to small businesses and just the big guys (like Amazon or Rakuten) can say "No! We're not going to do this!" But to others, this is another block in the road. 

Anyhow, it seems, according to my friend at Citi, that there is a fight going on about this right now but the association is insisting upon it.

Like I said, the big guys won't follow the rules (Why should they? They have all the money and money equals clout!) But the little guys and small businesses will be damaged by this new rule as customers will find it troublesome to have to go through just another process and a bunch of clicks to buy something.

Amazon's and Rakuten's "One-Click" systems will become even easier to use... The small businesses? They'll lose sales.

1 comment:

Anonymous said...

Ignoring the rule would be the best policy for those businesses that do not wish it; after all, if the new "service2 is worth anything, compared to the risk of fraud, the market will decide, not some despicable "rule".

On a related note, Paypal has been sending out requests for identification (driver's license, passport, alien registration card, etc.) for users in Japan, using the memes "terror" and "money laundering". Despite the fact that the bank account registered with Paypal has an approval process much stricter than what they now claim they (or whatever government agents claim is now required they) need.